WHARTON CAPITAL MARKETS LLC
Exhibit
1.1
▇▇▇▇▇▇▇ CAPITAL
MARKETS LLC
April 15,
2010
CONFIDENTIAL
EntreMed,
Inc.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Gentlemen:
This
letter (the “Agreement”) constitutes the agreement between EntreMed, Inc. (the
“Company”) and ▇▇▇▇▇▇▇ Capital Markets LLC (“▇▇▇▇▇▇▇” or the “Placement Agent”),
pursuant to which ▇▇▇▇▇▇▇ shall serve as the exclusive placement agent (the
“Services”) for the Company, on a “best-efforts” basis, in connection with the
proposed offer and placement (the “Offering”) of securities of the Company (the
“Securities”) pursuant to a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the “Securities Act”) and Rule 415(a)(1)(x)
thereunder, including shares (the “Shares”) of the Company’s common stock (the
“Common Stock”), and, to the extent included in the Offering, warrants to
purchase shares of Common Stock. The Placement Agent shall introduce prospective
purchasers, their associates and affiliates pre-approved by the Company
(collectively, the “Investors”) to the Company in connection with the purchase
or financing of up to $10 Million of the Company’s Securities. The terms of the
Offering and the Securities shall be mutually agreed upon by the Company and the
Investors in the Offering, and nothing herein implies that ▇▇▇▇▇▇▇ would have
the power or authority to bind the Company or obligate the Company to issue any
Securities or complete the Offering. The Company expressly acknowledges and
agrees that ▇▇▇▇▇▇▇’▇ obligations hereunder are on a reasonable best-efforts
basis only and that the execution of this Agreement does not constitute a
commitment by ▇▇▇▇▇▇▇ to purchase the Securities and does not ensure the
successful placement of the Securities or any portion thereof by
▇▇▇▇▇▇▇.
SECTION 1. FEES AND
EXPENSES.
In
connection with the Services described above, the Company agrees to pay to
▇▇▇▇▇▇▇ the following:
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A.
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Placement Agent’s
Fee. The Company shall pay to ▇▇▇▇▇▇▇ a cash placement
fee (the “Placement Agent’s Fee”) equal to 6% of the aggregate gross
proceeds of the Securities actually sold in the Offering. The Placement
Agent’s Fee shall be payable by wire transfer to ▇▇▇▇▇▇▇ immediately upon
the closing of the Offering (the
“Closing”).
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▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ – 40th FL. –
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ – O ▇▇▇-▇▇▇-▇▇▇▇ F
▇▇▇-▇▇▇-▇▇▇▇
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B.
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Expenses. In
addition to any fees payable to ▇▇▇▇▇▇▇ hereunder, the Company agrees to
reimburse ▇▇▇▇▇▇▇ for all reasonable out-of-pocket expenses incurred and
documented by ▇▇▇▇▇▇▇ in connection with its engagement hereunder,
including the reasonable fees of ▇▇▇▇▇▇▇’▇ counsel, but in no event more
than $10,000 without the prior written approval of the Company. Such
reimbursement shall be payable immediately upon the Closing of the
Offering (but only in the event of a Closing) from the gross proceeds of
the Securities sold.
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SECTION 2. TERM OF ENGAGEMENT.
The
term of ▇▇▇▇▇▇▇’▇ engagement will begin on the date hereof and end on the
earlier of the consummation of the Offering or May 14, 2010. Notwithstanding
anything to the contrary contained herein, the provisions concerning
confidentiality, indemnification, contribution, and the Company’s obligations to
pay fees and to reimburse expenses actually incurred pursuant to Section 1
hereof, will survive any expiration or termination of this
Agreement.
SECTION 3. FEE
TAIL.
The Placement Agent’s Fee and expense
reimbursements provided above shall be due and payable to ▇▇▇▇▇▇▇ irrespective
of whether the Investors consummate the Offering during the term of this
Agreement or thereafter. In addition, the Placement Agent shall be entitled to a
Placement Agent’s Fee, calculated and distributed in the manner provided in
Section 1 hereof, with respect to any future public or private offering or other
financing or capital raising transaction of any kind provided to the Company by
the Investors at any time within the 12-month period following the expiration or
termination of this Agreement.
SECTION 4. USE OF
INFORMATION.
The Company will furnish ▇▇▇▇▇▇▇ such
written information as ▇▇▇▇▇▇▇ reasonably requests in connection with the
performance of its Services hereunder. The Company understands, acknowledges and
agrees that, in performing its Services hereunder, ▇▇▇▇▇▇▇ will use and rely
upon such information as well as publicly available information regarding the
Company and that ▇▇▇▇▇▇▇ does not assume responsibility for independent
verification of the accuracy or completeness of any information, whether
publicly available or otherwise furnished to it, concerning the Company or
otherwise relevant to the Offering, including, without limitation, any financial
information, forecasts or projections considered by ▇▇▇▇▇▇▇ in connection with
the provision of its Services. ▇▇▇▇▇▇▇ agrees not to use any confidential
information concerning the Company provided to ▇▇▇▇▇▇▇ by the Company for any
purposes other than those contemplated under this Agreement.
SECTION
5. NEWS
RELEASES/ANNOUNCEMENTS.
The Company agrees not to issue any
press releases relating to the Offering, or place any “tombstone” advertisements
in financial newspapers or other financial journals, without the prior review of
▇▇▇▇▇▇▇ and without mentioning that ▇▇▇▇▇▇▇ is acting, or has acted, as
exclusive placement agent for the Offering.
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SECTION 6. REPRESENTATIONS AND
WARRANTIES.
The Company represents and warrants to,
and agrees with, the Placement Agent that:
(A) The Company has filed
with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (Registration File No. 333-161100) under the Securities
Act of 1933, as amended (the “Securities Act”), which became effective on
October 9, 2009, for the registration of the Shares under the Securities Act. At
the time of such filing, the Company met the requirements of Form S-3 under the
Securities Act. Such registration statement meets the requirements set forth in
Rule 415 (a)(1)(x) under the Securities Act and complies with said Rule. The
Company will file with the Commission pursuant to Rule 424(b) under the
Securities Act, and the rules and regulations (the “Rules and Regulations”) of
the Commission promulgated thereunder, a supplement to the form of prospectus
included in such registration statement relating to the placement of the Shares
and the plan of distribution thereof. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is hereinafter
called the “Registration Statement”, such prospectus in the form in which it
appears in the Registration Statement is hereinafter called the “Base
Prospectus”; and the supplemented form of prospectus, in the form in which it
will be filed with the Commission pursuant to Rule 424(b) (including the Base
Prospectus as so supplemented) is hereinafter called the “Prospectus
Supplement”.
(B) The Registration
Statement (and any further documents to be filed with the Commission) contains
all exhibits and schedules as required by the Securities Act. Each of
the Registration Statement and any post-effective amendment thereto, at the time
it became effective, and the Base Prospectus and Prospectus Supplement, complied
and complies in all material respects with the Securities Act and the Exchange
Act and the applicable Rules and Regulations thereunder, and did not and, as
amended or supplemented, if applicable, will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements there in not misleading. There are no
documents required to be filed with the Commission in connection with the
transaction contemplated hereby that (x) have not been filed as required
pursuant to the Securities Act, or (y) will not be filed within the requisite
time period.
SECTION 7. INDEMNIFICATION.
A. In connection with the Company’s
engagement of ▇▇▇▇▇▇▇ as Placement Agent, the Company hereby agrees to indemnify
and hold harmless ▇▇▇▇▇▇▇ and its affiliates, and the respective controlling
persons, directors, officers, shareholders, agents and employees of any of the
foregoing (collectively, the “Indemnified Persons”), from and against any and
all claims, actions, suits, proceedings (including those of shareholders),
damages, liabilities and expenses incurred by any of them (including the
reasonable fees and expenses of counsel), as incurred (collectively a “Claim”),
that are (i) related to or arise out of (a) any actions taken or omitted to be
taken (including any untrue statements made or any statements omitted to be
made) by the Company, or (b) any actions taken or omitted to be taken by any
Indemnified Person in connection with the Company’s engagement of ▇▇▇▇▇▇▇, or
(ii) otherwise relate to or arise out of ▇▇▇▇▇▇▇’▇ activities on the Company’s
behalf under ▇▇▇▇▇▇▇’▇ engagement, and the Company shall reimburse any
Indemnified Person for all expenses (including the reasonable fees and expenses
of counsel) as incurred by such Indemnified Person in connection with
investigating, preparing or defending any such claim, action, suit or
proceeding, whether or not in connection with pending or threatened litigation
in which any Indemnified Person is a party.
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The
Company will not, however, be responsible for any Claim that is finally
judicially determined to have resulted from the gross negligence or willful
misconduct of any person seeking indemnification for such Claim. The Company
further agrees that no Indemnified Person shall have any liability to the
Company for or in connection with the Company’s engagement of ▇▇▇▇▇▇▇ except for
any Claim incurred by the Company as a result of such Indemnified Person’s gross
negligence or willful misconduct.
B. The Company further agrees that
it will not, without the prior written consent of Wharton, settle, compromise or
consent to the entry of any judgment in any pending or threatened Claim in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such Claim), unless such
settlement, compromise or consent includes an unconditional, irrevocable release
of each Indemnified Person from any and all liability arising out of such
Claim.
C. Promptly upon receipt by an
Indemnified Person of notice of any complaint or the assertion or institution of
any Claim with respect to which indemnification is being sought hereunder, such
Indemnified Person shall notify the Company in writing of such complaint or of
such assertion or institution but failure to so notify the Company shall not
relieve the Company from any obligation it may have hereunder, except and only
to the extent such failure results in the forfeiture by the Company of
substantial rights and defenses. If the Company so elects or is requested by
such Indemnified Person, the Company will assume the defense of such Claim,
including the employment of counsel reasonably satisfactory to such Indemnified
Person and the payment of the fees and expenses of such counsel. In the event,
however, that legal counsel to such Indemnified Person reasonably determines
that having common counsel would present such counsel with a conflict of
interest or if the defendant in, or target of, any such Claim, includes an
Indemnified Person and the Company, and legal counsel to such Indemnified Person
reasonably concludes that there may be legal defenses available to it or other
Indemnified Persons different from or in addition to those available to the
Company, then such Indemnified Person may employ its own separate counsel to
represent or defend him, her or it in any such Claim and the Company shall pay
reasonable fees and expenses of such counsel. Notwithstanding anything herein to
the contrary, if the Company fails timely or diligently to defend, contest, or
otherwise protect against any Claim, the relevant Indemnified Party shall have
the right, but not the obligation, to defend, contest, compromise, settle,
assert cross claims or counterclaims, or otherwise protect against the same, and
shall be fully indemnified by the Company therefor, including, without
limitation, for the reasonable fees and expenses of its counsel and all amounts
paid as a result of such Claim or the compromise or settlement thereof. In
addition, with respect to any Claim in which the Company assumes the defense,
the Indemnified Person shall have the right to participate in such Claim and to
retain his, her or its own counsel therefor at his, her or its own
expense.
D. The Company agrees that
if any indemnity sought by an Indemnified Person hereunder is held by a court to
be unavailable for any reason (whether or not ▇▇▇▇▇▇▇ is the Indemnified
Person), then the Company and ▇▇▇▇▇▇▇ shall contribute to the Claim for which
such indemnity is held unavailable in such proportion as is appropriate to
reflect the relative benefits to the Company, on the one hand, and ▇▇▇▇▇▇▇ on
the other, in connection with ▇▇▇▇▇▇▇’▇ engagement referred to above, subject to
the limitation that in no event shall the amount of ▇▇▇▇▇▇▇’▇ contribution to
such Claim exceed the amount of cash fees actually received by ▇▇▇▇▇▇▇ from the
Company pursuant to ▇▇▇▇▇▇▇’▇ engagement. The Company hereby agrees that the
relative benefits to the Company, on the one hand, and ▇▇▇▇▇▇▇ on the other,
with respect to ▇▇▇▇▇▇▇’▇ engagement shall be deemed to be in the same
proportion as (i) the total value paid or proposed to be paid or received by the
Company or its stockholders, as the case may be, pursuant to the Offering
(whether or not consummated) for which ▇▇▇▇▇▇▇ is engaged to render Services
bears to (ii) the total cash fee paid or proposed to be paid to ▇▇▇▇▇▇▇ in
connection with such engagement.
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E. The Company’s indemnity,
reimbursement and contribution obligations under this Agreement (i) shall be in
addition to, and shall in no way limit or otherwise adversely affect any rights
that any Indemnified Party may have at law or equity, and (ii) shall be
effective whether or not the Company is at fault in any way.
SECTION 8. LIMITATION OF ENGAGEMENT TO
THE COMPANY.
The Company acknowledges that ▇▇▇▇▇▇▇
has been retained only by the Company, that ▇▇▇▇▇▇▇ is providing Services
hereunder as an independent contractor (and not in any fiduciary or agency
capacity) and that the Company’s engagement of ▇▇▇▇▇▇▇ is not deemed to be on
behalf of, and is not intended to confer rights upon, any shareholder, owner, or
partner of the Company or any other person not a party hereto as against ▇▇▇▇▇▇▇
or any of its affiliates, or any of its or their respective officers, directors,
controlling persons, employees or agents. The Company acknowledges that any
recommendation or advice, written or oral, given by ▇▇▇▇▇▇▇ to the Company in
connection with ▇▇▇▇▇▇▇’▇ engagement is intended solely for the benefit and use
of the Company’s management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer
any rights or remedies upon, any other person or be used or relied upon for any
other purpose.
SECTION 9. LIMITATION OF ▇▇▇▇▇▇▇’▇
LIABILITY TO THE COMPANY.
▇▇▇▇▇▇▇ and the Company further agree
that neither ▇▇▇▇▇▇▇ nor any of its affiliates or any of their respective
officers, directors, controlling persons employees or agents shall any liability
to the Company, its security holders or creditors, or any person asserting
claims on behalf of or in the right of the Company (whether direct or indirect,
in contract, tort, for an act of negligence or otherwise) for any losses, fees,
damages, liabilities, costs, expenses or equitable relief arising out of or
relating to this Agreement or the Services rendered hereunder, except for
losses, fees, damages, liabilities, costs or expenses that arise out of or are
based on any action of or failure to act by ▇▇▇▇▇▇▇ and that are finally
judicially determined to have resulted solely from the gross negligence or
willful misconduct of ▇▇▇▇▇▇▇.
SECTION 10. CLOSING.
The
obligations of the Placement Agent and the Investors, and the closing of the
sale of the Securities hereunder, are subject to each of the following terms and
conditions:
(A) No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
Commission.
(B) All corporate proceedings
and other legal matters incident to the authorization, form, execution, delivery
and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Placement Agent.
(C) No action shall have been
taken and no statute, rule, regulation or order shall have been enacted, adopted
or issued by any governmental agency or body which would, as of the Closing
Date, prevent the issuance or sale of Securities or materially and adversely
affect or potentially and adversely affect the business or operations of the
Company; and no injunction, restraining order or order of any other nature by
any federal or state court of competent jurisdiction shall have been issued as
of the Closing Date which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the
business or operations of the Company.
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(D) The Company shall have prepared
and filed with the Commission a Current Report on Form 8-K with respect to the
Offering, including as an exhibit thereto this Agreement.
(E) FINRA shall have raised no
objection to the fairness and reasonableness of the terms and arrangements of
this Agreement. The Company shall make an Issuer Filing with FINRA pursuant to
FINRA Rule 5110 with respect to the Registration Statement and pay all filing
fees in connection therewith.
(F) Prior to the Closing Date, the
Company shall have furnished to the Placement Agent such further information,
certificates and documents as the Placement Agent may reasonably request,
including an opinion of outside counsel to the Company, addressed to the
Placement Agent, in form and substance reasonably satisfactory to the Placement
Agent.
SECTION 11. GOVERNING
LAW.
This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to agreements made and to be fully performed
therein. Any disputes that arise under this Agreement, even after termination of
this Agreement, shall be heard only in the state or federal courts located in
the County of New York, State of New York. The parties hereto expressly agree to
submit themselves to the jurisdiction of the foregoing courts and expressly
waive any rights they may have to contest the jurisdiction, venue or authority
of such courts. In the event of the bringing of any action, or suit by a party
hereto against the other party hereto, arising out of or relating to this
Agreement, the party in whose favor the final judgment or award shall be entered
shall be entitled to have and recover from the other party the costs and
expenses incurred in connection therewith, including its reasonable attorneys’
fees. Any rights to trial by jury with respect to any such action, proceeding or
suit are hereby waived by ▇▇▇▇▇▇▇ and the Company.
SECTION 12. NOTICES.
All notices hereunder shall be in
writing and sent by certified mail, hand delivery, overnight delivery or fax, if
sent to the parties at their respective addresses or fax numbers set forth on
the signature page hereto. Notices sent by certified mail shall be deemed
received five days after mailing, notices sent by hand delivery or overnight
delivery shall be deemed received on the date of the relevant written record of
receipt, and notices delivered by facsimile transmission shall be deemed
received as of the date and time printed on the facsimile transmission
receipt.
SECTION 13. MISCELLANEOUS.
This
Agreement embodies the entire agreement and understanding between the parties
hereto, and supersedes all prior agreements and understandings relating to the
subject matter hereof. This Agreement may not be assigned by either party
without the prior written consent of the other party. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such determination
will not affect such provision in any other respect or any other provision of
this Agreement, which will remain in full force and effect. This
Agreement may not be amended or otherwise modified or waived except by an
instrument in writing signed by both the Company and ▇▇▇▇▇▇▇. The
representations, warranties, agreements and covenants contained herein shall
survive the closing of the Offering and delivery and/or exercise of the
Securities, as applicable.
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This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. Facsimile or electronic signatures shall create a valid
and binding obligation of the party executing the Agreement (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile
or electronic signature page were an original thereof.
Please
confirm that the foregoing correctly sets forth our agreement by signing and
returning to ▇▇▇▇▇▇▇ a copy of this Agreement.
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Very
truly yours,
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▇▇▇▇▇▇▇
CAPITAL MARKETS LLC
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By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
President
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Address for
notice:
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▇▇▇▇▇▇▇
Capital Markets LLC
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▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇, ▇▇▇▇▇
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Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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Attention:
General Counsel
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Accepted
and Agreed to as of
the date
first written above:
By: /s/ ▇▇▇▇▇▇▇ ▇.
▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇
Title: Chief Operating Officer, General Counsel &
Secretary
Address for
notice:
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: COO
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